Question: 11. DVLA Ltd has a GHS100 face value bonds with 20 percent coupon rate and 5 years remaining until maturity. Interest payments are made semi-annually.

11. DVLA Ltd has a GHS100 face value bonds with 20 percent coupon rate and 5 years remaining until maturity. Interest payments are made semi-annually. You require a return of 16 percent to invest in this bond.

Required:

a. What value would you place on the bond?

b. Should the bond sell at a discount or at a premium? Explain.

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